US Manufacturing Remains Weak but Consumers are Happy?

The American manufacturing sectors continued to expand at a slow pace with modest recovery in new orders and production countered by weakness in employment.

The national purchasing manager’s index from the Institute of Supply Management (ISM) was at 51.5 in April as in March just missing the 52.0 forecast. It was the lowest reading since May 2013. The index has not risen in six months and has declined in five of the months since reaching 57.9 last October.

Consumer sentiment from the University of Michigan survey roe to 95.9 in April from 93.0 in March. It was the second highest measure in over eight years excepting January's 98.1 score.

The gauge of current conditions climbed to 107.00 from 105.00, putting it at the highest level since January 2007 except for this past January’s 109.3. The scale for consumers’ expectations for their own financial situation and the economy in general rose to 88.0 in April from 85.0. Again, except for January's register at 91.0, it was the best consumer view of their future in over in over a decade since December 2004.

The new orders index in the ISM survey climbed to 53.5 in April from 51.8 the prior month for the first gain in half a year and the production index jumped to 56.0 from 53. Both remain distant from their recent highs, 63.9 for new orders and 63.1 for production last August.

Employment was the biggest disappointment in the ISM report which is considered a leading indicator for the economy as a whole even though manufacturing is only about 15 percent of the U.S. economic activity.

The job index fell to 48.3 in April, the first month below the 50 division between expansion and contraction since March 2013 and the lowest employment reading since September 2009.

U.S. construction spending unexpectedly plunged 0.6 percent in March to a six-month low, according to the Census Bureau, well below the 0.5 percent forecast in the Bloomberg survey of economists. February's figures were revised to produce a flat month instead of the previously reported 0.1 percent dip.

Private residential construction declined sharply reflecting uncertainty about housing demand as the market enters its busy spring and summer selling season. The annual rate of $966.6 billion was the the lowest total since September, the Commerce Department reported.

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